Air New Zealand boss optimistic despite fall in half-year profits

Air New Zealand boss optimistic despite fall in half-year profits

Half year pre-tax profits at Air New Zealand fell but the airline expects a financial boost for the full year.

Earnings before taxation for the first six months of the 2018 financial year were down to NZ$323 million from NZ$349 million in the same period a year earlier.

Net profit after taxation dropped by 9.4% to NZ$232 million.

The airline carried 8.5 million passengers in the half year with operating revenue growth of 5.6%.

ANZ saw “robust demand across all markets and particularly strong growth in the short-haul network”.

Passenger revenue reached an all-time record for a half year at NZ$2.3 billion.

Efficiencies from “sustainable cost initiatives” offset the impact of inflation on unit costs, excluding fuel which rose in price by 18%.

Chairman Tony Carter said: “This high quality interim performance was driven by robust passenger demand and revenue growth, reflecting the airline’s strong position in New Zealand and throughout our Pacific Rim network.”

Carter added: “Looking to the remainder of the year, we are optimistic about the overall market dynamics.

“Based upon the current market conditions and despite the increased price of jet fuel, the company is still expecting 2018 earnings before taxation to exceed the prior year.”

The airline is to start up to five non-stop flights between Auckland and Taipei in Taiwan a week from November using Boeing 787-9 Dreamliner aircraft. Taipei will become the airline’s seventh destination in Asia.

Chief executive Christopher Luxon described 2018 as shaping up to be another year of growth.

“The domestic market continues to show strength driven by the New Zealand economy as well as inbound tourism, and we will be increasing capacity approximately six percent across our regional and jet services to support that demand over the second half of the financial year,” he said.

“The trans-Tasman and Pacific Island routes have also responded strongly to additional wide-body services and targeted capacity increases.

“Finally, our alliance partnerships continue to drive value across our international long-haul network, and have been a key factor in our ability to effectively compete against much larger airlines.”

Luxon also acknowledged and thanked staff for their work in dealing with recent operational disruptions.

“We have had some unprecedented weather events, along with the fuel pipeline disruption and the unscheduled engine maintenance on some of the Boeing 787-9 aircraft,” he said.

“All of these disruptions are outside of our control, but our people have been remarkable, with a clear focus on doing the best for our customers, and that is what really sets us apart and drives such strong loyalty for our airline.”

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